Investing
Google (GOOG) Admits It Business Is Challenged By Recession
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It is probably a pretty fair guess that Google (GOOG) will have a poor quarter and that the stock is heading for new lows.
Eric Schmidt, the search company’s CEO, made downbeat comments about the economy at a conference yesterday.
Media reports quote him as saying, “I view the situation as pretty dire.” Most CEOs don’t make comments about the broader economy unless they are signaling that their own results will be hurt by it. Since every other category of advertising, including online display, is being hit extremely hard by the recession, it would make sense that search marketing is not immune.
Google now trades at $325, down from a high of $747 in November 2007. It hit a low of $247.30 this last November. According to First Call, the lowest EPS estimate for Q1 among 33 analysts covering the company is $4.57, which would be down from $4.84 in the same quarter a year ago. The lowest estimate for revenue is $3.81 billion, a slight increase compared to Q1 2008.
Schmidt is telling the market his company will miss its numbers. It will be the last big media company to be crushed by the recession, but it will be crushed.
Douglas A. McIntyre
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